I have been told by the VW dealer that Passat brake rotors cannot be machined and must be replaced. Any experience or advice?
They’re probably correct. Many rotors are made thinner now than they used to be and machining will put them underneath minimum thickness specs; which is a safety and liability issue.
Most OEM rotors are designed light and are more efficient and effective, but they are often not suitable for machining. The good news is the cost of good new rotors is little more than the cost of machining rotors. Go with the new ones.
Dealers are no better (or worse) than independent mechanics for almost anything you might need done on your car. They will almost always charge more per hour and often more for parts and supplies. They also tend to look at repairs a little different than the independent. A dealer may well recommend work that strictly may not be needed, but could be connected to the problem or maybe replace a part when a little repair would fix it ALMOST as good a new. There is no need to bring your car to the dealer for any service other than service that is going to be paid for by a recall or original warrantee. I suggest that most people would be better off finding a good independent (Not working for a chain) mechanic.
Change them out. Rotors are cheap enough replacing vs the hourly labor rate making it a much more prudent move to replace vs rework.